As we start the 2010 year, our weather patterns along the east coast have been anything but normal! This alone is a cause for concern. Add to that the fact that each of the last few hurricane season storms have become more and more costly and you can see why FEMA, the government agency that oversees the National Flood Program, must make changes in order to keep the program solvent.

To solve this financial dilemma, FEMA and the National Flood Insurance Program will be bringing more properties into the mandatory flood insurance program, updating their flood hazard maps across the country and initiated a rate increase last fall. At present, they are updating maps in Monmouth County and will continue into Ocean County this spring.

How will this affect you?

When new maps are issued, YOUR home flood zone category may change as well—along with some flood insurance requirements for your location. What this all means is if you’re home flood map category has been changed from a low or moderate flood risk area( such as “I’m not in a flood zone but I’m darn close”) into a high-risk flood zone, you will be required to purchase flood insurance, minimum to the amount of your mortgage loan. Obviously, high risk flood zone rates are more expensive.

The good news is that you can save money through a process known as “grandfathering”. The National Flood Insurance program has initiated grandfathering rules to recognize policyholders whose homes were built in compliance with the flood map in effect at the time of construction and have maintained continuous preferred flood insurance coverage. OK Hauswirth, say it in layman’s terms. Say for example that your home is not in a federally mandated flood insurance zone but you’re home is close to a high risk flood zone. Chances are your area will be re-mapped and you’ll be deemed to be in a high risk flood zone. So if you purchase a flood policy now, you will be paying preferred rates even after the zone does change. That’s “grandfathering”. That’s also cost effective!

To lock in the lower rate, you must purchase the flood insurance before the new maps become effective. At the present time, FEMA is re-drawing the maps in Monmouth County which will take effect this fall, followed by Ocean County then Atlantic County.

For many of our policyholders there will be no change in the risk level. However, this is a good time to review your coverage and to ensure that your building and contents are adequately protected.